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Transurban expands into Qld for $7b

Trevor Chappell

Toll roads operator Transurban has extended its reach, leading a consortium that has bought several Brisbane toll roads from the Queensland government for around $7 billion.

The consortium beat other bidders to acquire Queensland Motorways' 73.5 kilometres of roads and bridges for $6.67 billion, plus stamp duty of $384 million and transaction costs of $447 million.

The Queensland Motorways portfolio comprises the Logan and Gateway motorways, CLEM7 tunnel, Go Between Bridge and Legacy Way, which is expected to begin operating in June 2015.

Transurban chief executive Scott Charlton said the Brisbane toll roads were high quality assets that would help grow earnings for Transurban securityholders.

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"Clearly, this is a portfolio of attractive assets with all the characteristics of our existing networks in Sydney and Melbourne, and the attractive demographics of the Queensland market," Mr Charlton said.

He rejected suggestions the price was too high, saying the roads had substantially longer remaining concession lives than Transurban's other toll roads.

The acquisition price did not include the savings and benefits that Transurban could make from operating efficiencies, such as improving call centre operations, credit and billing functions, and tolling systems, Mr Charlton added.

"I don't think people understood how much value was there, or flagged, before the transaction occurred," he told reporters.

Transurban believed it had beat the nearest bidder by less than one per cent, Mr Charlton said.

Morningstar analyst Adrian Atkins said the acquisition made strategic sense for Transurban.

"Transurban doesn't have any assets in Brisbane at this point in time, it's a core market in Australia, and there should be some back-office synergies," he said.

"It's a growth area, where you might expect there to be more opportunities in the future."

Transurban securities, which last traded at $7.27, are in a trading halt while the company raises $2.74 billion through the issue of new securities to help fund its share of the acquisition.

Transurban holds a 62.5 per cent stake in the consortium that successfully bid for Queensland Motorways, and will operate the Brisbane network.

The other members of the consortium are AustralianSuper, with a stake of 25 per cent; and Tawreed, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, which has an interest of 12.5 per cent.